USD/CNH Price Analysis: Upside extension running out of steam

• The upside is meeting a strong level of resistance and the focus is back on the downside.
• USD/CNH bears are looking for a return to the mean of the daily bullish impulse. 

USD/CNH’s momentum has slowed in the run to a resistance structure that was marked as old support across a daily time line.

The bears are looking for bearish conditions to be confirmed on the lower time frames in order to target the W-formation’s neckline. 

Daily chart

The price is tempting the bear’s commitments at the juncture at a familiar area of support which would now be expected to act as resistance. 

The W-formation’s neckline has a confluence with the 50% mean reversion point as an attractive target area. 

1-hour chart

From a 1-hour perspective, the price first needs to break support and the bullish 21-moving average, and in doing so, the path will be clear for a high probability trade day-trading set-up from a bearish structure and with a favourable risk-reward ratio.